Pitango partner talks new $175M health tech fund, AI, and rocky markets

Pitango VC

Last week, Israel’s Pitango VC announced the closing of its second healthcare-focused fund, Pitango HealthTech II. The $175 million fund will focus on breakthrough areas like AI, as well as medical devices and novel biologic companies, with a focus on Israeli companies, but not an exclusive one.

pharmaphorum spoke with Managing Partner Ittai Harel about the new fund, why they launched it now, and some of their initial investments.

“With the entry of computerisation and data science, we're seeing that impact on all aspects of healthcare, from the kind of back-office operations-side clinical, all the way to drug discovery and new things that are being discovered in genomics, proteomics, and more,” he said.

That makes it an exciting time to be investing in digital health and health tech. They’re also not shying away from a bearish market.

“The fact that timing of the market has kind of been rocky not only hasn't scared us, but in fact drove us to act,” Harel explained, “because these tend to be some of the times where you can really do great work in terms of partnering with the best entrepreneurs on kind of an equal basis and there's much more ability to really be selective, slow, and picking your deals. History has taught us that times like these have resulted in very good results for investors and partnering with entrepreneurs.”

Added to that is the fact that, while many innovations and technologies are somewhat new, they’re not so new that its terra incognita for investors.

“Companies are searching for quality investors after they've already proven something -- they've shown their proof of concept, they've made either commercial progress or clinical progress,” Harel said. “You don't have the hype and rush there was two, three years ago to invest in just anything that looked good and moved fast. You can actually be a lot more disciplined in looking at the fundamentals, at results, and picking.”

Unsurprisingly, Pitango is looking hard at AI companies. Their first investment, QuantHealth, is using AI to simulate clinical trials.

“They’re creating a model which can look at all this data and run millions and millions of simulations,” Harel said. “They can identify aspects that can guide clinical design, choose the right patients ahead of time, target the drug, and so forth.”

They’ve also made an investment in Nevia Bio, an early diagnosis company in the women’s health space. 

“The other early-stage investment we made is in an all-women team that's leading an effort that has shown a fantastic opportunity to identify women's health illnesses very early on, like ovarian cancer, which today you only discover in stage three or four, which is unfortunately a death sentence to most women,” he explained. “And they've been able to basically shine a light very differently using proteomic vaginal samples, taking a unique approach, leveraging AI and looking at samples differently than most companies do today, with stellar results.”

Going forward, the fund shouldn’t be expected to shy away from hard biopharma investments. Previously, Pitango HealthTech has invested in intra-operative immunotherapy company Surge Therapeutics, as well as T-Scan Therapeutics, a cell therapy company working on an innovative multiplex approach to CAR-T.